Bitesize InsurTech: TongJuBao

TongJuBao is a Chinese peer to peer insurance startup in the form of a community risk sharing platform. Designed to appeal to the Chinese market, TongJuBao focusses on providing insurance solutions to social risks which have a particular impact in China. These social risks include marriage safety, child safety and income protection.

The platform works by providing ‘Community Protection’ to its members. Members who request cover for a specific life risk form communities of support. The member pool their premiums together and withdraw from the pool if they have a claim. And if there is a large portion of the pool remaining by the end of the year, members can receive a refund of their premiums – up to 75% if there are no claims. One of the unique elements of TongJuBao’s system is that the members themselves get to decide how they share the risk. They have the option to join an existing community or create their own, inviting family, friends and colleagues to form a community of known contacts. The community vote on major changes so everyone has a voice.

TongJuBao’s role in the community it to maintain the platform both administratively and technologically, to provide insurance expertise and to manage all claims. All claims are assessed by TongJuBao’s experts to ensure they are fair and not fraudulent. One of the startup’s unique selling points is that they take no stake in any claim. Their fees are made purely from a percentage of the premiums paid in to each pool.

TongJuBao is neither broker or insurer. It is a company, licensed under Civil Law, which provides the platform on which their community members enter a contractual framework. The firm is therefore unregulated in the traditional sense, with its members determining the path of their protection. However, if the model is a success I expect regulation will be imposed upon them.